ISLAMABAD, PAKISTAN
— In what analysts say is a severe setback to an already teetering peace process, Indian authorities have officially implicated Pakistan in the deadly July 11 railway blasts in Mumbai (Bombay) and charged Islamabad with failing to curb terrorism.

Although India has not named specific names, awaiting more evidence as it tracks down leads, it made clear that the possibility of Pakistani involvement could stall the peace process. And the fallout has been swift: The next round of high-level peace talks was originally slated for this Thursday in New Delhi, but Indian officials have now postponed them indefinitely following the Mumbai blasts. The setback, analysts here say, exposes the limited progress of the faltering peace process begun in 2004, and highlights the obstacles for advancement presented by the conservative bureaucracies on both sides of the border.

"The Indian side mirrors the Pakistani side. The civil bureaucracy on the Indian side is as conservative as the military bureaucracy on the Pakistani. The bureaucracies are the impediment," says Samina Ahmed, South Asia director of the International Crisis Group (ICG).

India and Pakistan have fought four wars and both possess nuclear weapons. The fledgling peace process, which aims to resolve territorial disputes and animosities as well as expand trade and transit across their shared border, was already, by most accounts, only barely progressing. Symbolic overtures, such as the opening of new border crossings in Kashmir and the inauguration of a bus service between the two countries, offered a glimmer of hope but little substantive reform, according to analysts.

Peace has dragged, observers say, because the mind-sets on both sides have hardened, with bureaucratic hawks outnumbering doves.

"There's been a hardening of positions over the years," says Ayesha Siddiqa, an independent defense analyst in Islamabad. "On India's side, there's an image issue. Terrorists: That's how they popularly know us. On the Pakistani side, there's an increase in nationalism. Now you have a new generation which is very xenophobic."

An attack of this magnitude was not what the process needed. India's Prime Minister Manmohan Singh, on a visit to Mumbai this past week, said that Pakistan had promised its territory "would not be used to promote, encourage, aid, and abet terrorism," adding "that assurance has to be fulfilled before the peace process ... progress." Pakistan denied claims of involvement, reiterating its commitment to peace and offering help in the investigations.

Analysts agree the incident could create an impasse, but hope that a situation like that of 2002, when the two countries teetered on the brink of war, can be avoided by sustained dialogue.

"The talks need to continue. It's absolutely essential that the talks not shut down," says Ms. Ahmed of ICG. In the longer term, analysts agree that setting the peace process back on track requires broader engagement from civil society – think tanks, academia, the media, and ordinary people – who have little influence over the decisionmaking inside conservative bureaucracies. Here in Pakistan, they say, peace with India is a priority of both civil society groups as well as major political parties. But that impulse is drowned out by the heavy-handed rule of the military.

"Part of the problem with Musharraf running the peace process is that he has only one constituency: the military. And the military is intrinsically conservative and has a long history of conflicts with India," says Ahmed. "If you were to have a democratic transition, you could give civil society players more of a role. Without civilian input, it's going to be very difficult to move forward."